The latest Boeing and aerospace news, including updates about the Boeing 787 Dreamliner, 747-8 and 737, Airbus A380 and A350, the anticipated Boeing 797 and Boeing jobs and layoffs

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Boeing will boost 737 rate to 38 a month in 2013

Boeing will raise its 737 production rate to 38 a month in the second quarter of 2013, the company announced Thursday. The news comes three months after the company said it would raise the rate from 31.5 a month to 35 a month in early 2012.

“Increasing production is in response to customer demand for this airplane,” Boeing Commercial Airplanes President and Chief Executive Officer Jim Albaugh said in a news release. “Airlines want this innovative airplane sooner to renew their fleets to serve their customers. We made this decision after careful evaluation by Boeing and our supplier partners.”

Boeing said its backlog of orders for more than 2,000 737s, options it expects customers to exercise and ongoing sales campaigns contributed to the decision. Boeing has booked orders for 261 737s this year, with cancellation of orders for just 11 of the single-aisle airliners.

“Airlines placing orders now will get 737s mid-decade,” Randy Tinseth, marketing chief at Boeing Commercial Airplanes, wrote on his blog. “Of course, our customers have a long planning horizon, which means they’re able to place orders well ahead of their projected need. But as you can imagine, airlines can wait only up to a certain point.

“So, the answer to this ‘dilemma’ is to increase our rate so that we keep the backlog manageable.”

In recent months, Boeing executives have said increasing the rate had more to do with ensuring the supply chain could handle it than with demand.

Boeing has done a lot of planning to ensure the supply chain is ready, Beverly Wyse, vice president and general manager of the 737 program, said in an interview Thursday.

“We’re very focused on our on-time delivery and quality, but I also have a lot of confidence in this team,” she said. “We’ve increased our production rate six times since 2003. We’ve more than doubled our production rate and we’ve done it successfully.”

Asked if the increase would mean physical expansion at some suppliers, Wyse said: “We have some what I would call minor facilities expansion potential taking place at some of our suppliers, but in general what we’re trying to focus on is using lean manufacturing to build capacity within their current footprint, and we’re having good success with that.”

Boeing’s 737 facilities also will absorb the increase largely within their current footprint, but with more workers, she said. “For each of the rate increases we’ll bring on several hundred additional employees.”

Boeing is spacing out the increases to ensure production stabilizes at each new level, Wyse said. “We want to make sure that, for instance, those places where we bring on additional capital investments, that we have enough time to get the new machinery in place, get the new people in and trained.”

Asked about more potential increases, Wyse noted that Boeing expects customers to buy more than 21,000 new single-aisle jets (of all types) over the next 20 years.

“The 737 is by far the world’s preferred single-aisle aircraft,” she said. “So I think I would look for more rate increases, maybe not in the near future, but in the future.”

Tom Wroblewski, president of the International Association of Machinists and Aerospace Workers District 751 said: “Thirty-eight planes a month is a great challenge, but one our members will achieve.

“The fact that Boeing is able to build jets at this all-time record rate is a testament to the skills and experience of the workforce here in Puget Sound. They are an asset Boeing can’t replicate anywhere else.”

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